IMPACT OF INTEREST RATE CHANGES ON STOCK MARKET PERFORMANCE AN EMPIRICAL STUDY

Monetary policy consists of interest rates and they are a major tool in shaping the behavior in the stock market. Fluctuations in interest rates impact the prices of equities by adjustment in the discount rates, cost of financing the corporation, and speculation of investors. This paper empirically investigates the effects of changes in interest rates on the performance of the stock market with reference to its influence on the stocks returns, and the volatility of the market. The study assesses the interest rate move transmission mechanism to the equity market using second-hand time-series data and econometric analysis. The findings reveal that there is largely an inverse relationship between interest rates and the stock market returns with the rising rates of interest rates mostly resulting in a drop in the prices of the stock while lowering of the interest rates will support the growth of the market. Nevertheless, the level of the impact differs depending on industries and economical states of affairs. The results demonstrate the significance of interest rate movements to investors and policymakers and financial analysts and the role played by effectively communicating the monetary policy role in maintaining financial market stability

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Publication Details

Journal
Zenodo (CERN European Organization for Nuclear Research)
Published
2026-02-02
DOI
https://doi.org/10.5281/zenodo.18460730
Primary Topic
Financial Risk and Volatility Modeling
Type
article
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article

IMPACT OF INTEREST RATE CHANGES ON STOCK MARKET PERFORMANCE AN EMPIRICAL STUDY

Satya Pavan Kumar Ratnakaram, Sagar Shinde, Dr. Shrey Shukla, Dr. Biswo Ranjan Mishra et al.
Zenodo (CERN European Organization for Nuclear Research)
Financial Risk and Volatility Modeling
article

IMPACT OF INTEREST RATE CHANGES ON STOCK MARKET PERFORMANCE AN EMPIRICAL STUDY

Satya Pavan Kumar Ratnakaram, Sagar Shinde, Dr. Shrey Shukla, Dr. Biswo Ranjan Mishra, Mr. Ginmunlal Khongsai, Dr Lalit Mohan Trivedi
article en

Abstract

Monetary policy consists of interest rates and they are a major tool in shaping the behavior in the stock market. Fluctuations in interest rates impact the prices of equities by adjustment in the discount rates, cost of financing the corporation, and speculation of investors. This paper empirically investigates the effects of changes in interest rates on the performance of the stock market with reference to its influence on the stocks returns, and the volatility of the market. The study assesses the interest rate move transmission mechanism to the equity market using second-hand time-series data and econometric analysis. The findings reveal that there is largely an inverse relationship between interest rates and the stock market returns with the rising rates of interest rates mostly resulting in a drop in the prices of the stock while lowering of the interest rates will support the growth of the market. Nevertheless, the level of the impact differs depending on industries and economical states of affairs. The results demonstrate the significance of interest rate movements to investors and policymakers and financial analysts and the role played by effectively communicating the monetary policy role in maintaining financial market stability

Zenodo (CERN European Organization for Nuclear Research)
University of Delhi (IN), IFTM University (IN), Utkal University (IN), Bahrain Polytechnic (BH), Savitribai Phule Pune University (IN), Indian Institute of Technology Kanpur (IN)
Openalex Percentile: Top 72%
Financial Risk and Volatility Modeling
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IMPACT OF INTEREST RATE CHANGES ON STOCK MARKET PERFORMANCE AN EMPIRICAL STUDY — Satya Pavan Kumar Ratnakaram, Sagar Shinde, et al. · Zenodo (CERN European Organization for Nuclear Research) (2026) | TGRS Research Map | TGRS